The mortgage crisis showed that some residential mortgage lenders weren’t doing a good job of keeping careful records and communicating with borrowers. Some of this affected all borrowers, but the worst effect was that some people who could have worked out their problems with the right help, lost their homes. Congress has told the Consumer Financial Protection Bureau (CFPB) to adopt new federal regulations to avoid this in the future. On this site, you can read about the new proposals, react to them, and discuss them with others. What you say here will make a difference: CFPB is required to consider public comment before making a final decision, and it will get a detailed summary of what Regulation Room commenters have to say.

Agency Proposal

For All Borrowers: Asking For, and Getting, Information

§1. Making requests; getting answers

Now, if the borrower wants information about his/her account, the servicer doesn’t have to answer unless the request comes in writing, and in a particular form. But most borrowers try to get information over the phone. So, CFPB is proposing that servicers must respond to oral requests as well as written ones. And, it wants to shorten the response time. Servicers are very worried about the costs of this, so CFPB is also proposing some limits on information requests.

What this means for consumers. The servicer would have to treat oral and written requests for information the same way:

Notify the borrower in writing within 5 business days that it got the request, unless it can provide the information within this time

Respond within 10 business days (@ 2 calendar weeks) to requests for information about who currently owns the mortgage. This time period can’t be extended.

Respond within 30 business days (@ 6 calendar weeks) to other kinds of requests. This can be extended to 45 business days (@ 9 calendar weeks) if, within the original 30 business days, the servicer tells the borrower it needs more time, and why.

The servicer couldn’t require the borrower to catch up on payments before responding. It couldn’t charge a fee for responding, except when the borrower requests a payoff amount (See Options for Avoiding Foreclosure § 3). Should CFPB allow servicers to charge for this? Are there other kinds of information requests that they should be able to charge for?

To help servicers control costs

they could have a special phone number for requests and require borrowers to use only this number.

they could ignore requests made by email or online unless they tell borrowers these methods may be used.

they could provide the requested information orally (i.e., save the expense of a letter).

CFPB is not proposing to change the current rule that servicers don’t have to respond to information requests written on a payment coupon. Are these good compromises between making it easier for borrowers and not making it too expensive for servicers (who might pass along costs to consumers)?

Small servicers are especially concerned about the costs of keeping track of oral information requests. Should CFPB allow small servicers to respond only to written information requests?

What this means for servicers. Requests for information, whether oral or written, would have to be treated the same way as “qualified written requests.” Under the proposed new requirements for “reasonable information management policies and procedures,” servicers must be able to “provide borrowers with accurate and timely information and documents in response to borrower requests.” Servicers will want to look at CFPB’s commentary on which entities should be identified [RESPA 1024.36(a)(2)] if a borrower asks for information about the loan owner.

What new burdens will the proposals involve? CFPB thinks that allowing servicers to respond orally will limit new costs, for it’s been told that servicers who now respond to telephone requests usually can do so in the original phone call, or within an hour. Servicers who respond orally should make a note in the file, record the phone conversation, or in some other way document that they responded. (Written correspondence that includes the information requested would be adequate proof.)

The phone number designated for information requests must be the same as the number provided for error resolution (see the Getting Errors Fixed post), and must be “clearly and conspicuously” identified to borrowers. If the servicer provides different numbers for borrowers in different states, it must respond to a borrower’s request made at any of these numbers. An automated answering system can be used so long as the menu choices are clear and include talking to a real person. As with current rules, the servicer must respond to a request from someone purporting to be the borrower’s agent, although it can have “reasonable procedures” for verifying that the requestor is authorized to act for the borrower.

As part of a general expansion of the scope of Regulation X, the information request requirements would apply to subordinate lien (as well as primary) closed-end mortgages.

§2. What kinds of information?

CFPB is aware that it’s often trial lawyers, rather than ordinary consumers, who have submitted “qualified written requests” for information in the past. It doesn’t want to encourage this, because its main concern is that consumers can get information they need about their mortgage accounts. So, it proposes to define types of requests the servicer doesn’t have to respond to.

What this means for consumers. The servicer would not have to respond to requests:

that the servicer has already answered once (unless the information changes over time);

for information it can’t get from its records in the “ordinary course of business” with “reasonable efforts” (Another part of CFPB’s proposal – that servicers have “reasonable information management policies and procedures” for keeping loan records – would ensure that information about mortgage accounts is reasonably available to give borrowers);

for an “unreasonable volume of documents or information”

that are “overbroad,” meaning that the servicer can’t tell what specific information the borrower wants (is this a good definition of “overbroad”?)

that are “unduly burdensome,” meaning that a diligent servicer would need more than 45 business days to respond, that “unreasonable” costs or effort would be involved, or that the request is the kind usually made during a law suit (is this a good definition? are there other or better criteria for knowing when a request is unduly burdensome?)

The servicer must tell the borrower within 5 business days if it thinks one of these reasons applies (and which one). Also, if the servicer can identify a proper information request in what is otherwise an overbroad or unduly burdensome request, it must respond to the valid request. Would ordinary borrowers be hurt by any of these restrictions?

What this means for servicers. CFPB is trying to increase ordinary consumers’ access to their own mortgage information while protecting servicers from requests that are more appropriately handled through discovery processes in litigation. Has it properly identified problematic information requests? In answering this, servicers will want to look at: examples of when information is and isn’t “reasonably available in the ordinary course of business”(§1024.36(d)(1)); what information can be withheld as “confidential, proprietary, or general corporate information” (§1024.36(f)(1)(ii)); and what kinds of requests are “overbroad or unduly burdensome” (§1024.36(f)(1)(iv)).

The servicer already uses the “overly broad” argument. While some of my QWR questions where answered more than once, other very relevant questions where not. Why is the request for the name of the trust overly broad? Why is it overly broad to asked for a copy of the loan with endorsements? Why is it overly broad to asked for the itemization of nearly $ 5000 in reinstatement fees that accrued in 11 days? My servicer refuses to answer these questions, saying they are overly broad. I think these questions were very precise. I took my servicer 62 business days to deny answering these questions. If they servicers can’t handle the business, they should get out. By the time I have payed of my $ 200,000 loan I will have payed $ 500,000 total. For $ 300,000 I think I can demand a little service.

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Thank you for your input, britt. It sounds like you believe your servicer used “overly broad” as an excuse to avoid responding to information requests. CFPB proposes to define “overbroad” requests as requests where a servicer cant’ tell what specific information the borrower wants and where they believe they’d end up providing an “unreasonable” volume of information. You can see the entire definition in the proposal here: Response to Information Request Do you think this is a good definition?

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britt, CFPB is proposing to give borrowers the option of either oral or written communication. Do you think that the risk of not being able to take them to court (or being less prepared for court) outweighs the benefits to borrowers of getting a response over the phone?

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The borrower already can ask their banks questions over the phone. I have tried “over the phone” a lot. I have heard they have the original note at a time when they were not supposed to have it. I have heard “we don’t have the note” when they were supposed to have it. Very simple questions such as the amount of reinstatement fees have gone unanswered over the phone. In hindsight I wish I would have recorded some of the phone conversations. I costs the consumer more time and money to request information in writing – not the servicer. I can only advise homeowners to have it all in written form and send it by certified mail. I don’t think homeowners have any benefit by asking questions over the phone (not like they can’t do that now).

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The answers to my QWR were quite surprising. The servicer might argue they have too high of costs and burden to reply and that some are “overly broad”. However, the servicer had no problem providing me pages and pages of payoff statement and payment history – they actually send these information several times for some strange reason. However, even after they wrote me that they checked the reinstatement fees and confirmed those as “correct” they cannot itemize even half of them. That would take one or two pages to print out and mail – much easier than the information they were willing to provide. That request was “too broad”. So yes, the servicer can call too broad what ever they want to. I will now write a new QWR asking again for itemization… more »

…of the fees. As a bank they should be able to find out how they themselves came up with that number – especially as they have checked them and confirmed in writing that they were correct. By the way – the confirmation about the fees being correct came in writing and a copy went to the CFPB. I don’t believe I would have gotten an answer at all if I had not complained with the CFPB. And here is a suggestion for the servicer to cut cost: in pre-foreclosure we received a “Home Transition Guide” – magazine style and no doubt expensive to print and send that we really didn’t care for. During the Hamp modification trial we received the same request for our tax returns via Fed Ex over and over again (about 7 or 8 times because they kept loosing our documents). Also, ten days after we reinstated, they send Fed Ex AGAIN with a note that we needed to short sale or give them the deed in lieu of foreclosure. One would think they own Fed Ex as much as they use it. Some servicers are either completely ineffective with internal communication or they really enjoy throwing money at Fed Ex.
Also: the proposed clause “for information it can’t get from its records in the “ordinary course of business” with “reasonable efforts” is downright inviting fraud. They need the original promissory note with endorsements or allonge to assign it when the loan is transferred. When they obtain it, it should not be very hard to make a copy, right? Since the ordinary course of their business has become robo-signing, it makes it even easier to deny the request of a copy of the endorsed note.
As for information “not directly related to the account”: this exclusion would give them right to hide fees from their affiliates. That could make the game of inflated maintenance fees in foreclosure, force placed insurance, unearned kickback fees, attorney fees a whole new chance. If a servicer charges these fees, they should know what they are for and have no problem of disclosing. Last but not least: the servicer already successfully denies to answer QWR that can be interpreted as nothing but harassment. Do I think we need to make it any easier on them? No I don’t.
My conclusion is that the servicers just don’t want to inform the consumers. In the year 2012 they can get all the information tied to a borrowers loan with a few strokes on the keyboard. Nothing too difficult. It is just that some information they DO NOT WANT TO GIVE.

The CFPB’s only role is to protect the consumer. They should not even have to worry about making it easier for or less costly for the servicer or the bank. My servicer chose to spend money on hiring a high profile law firm only to (not) answer my QWR entirely. Well – that is their choice.« less

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Thank you for sharing your experience again, britt. CFPB is responsible for protecting consumers, but Congress directed CFPB to also consider the costs to the companies it’s regulating and whether new rules will cut back on new lending to consumers. You can read more about why the CFPB has to do that here. CFPB accordingly did a cost-benefit analysis. Do you think that CFPB has weighed the benefits to consumers against the costs correctly?

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I agree Britt. I believe the intent of the consumer is to retrieve all internal comments (servicer, bank, GSE, Trust Documents and any other miscellaneous information as any other clear and transparent Discovery would uncover; electronic or written). All of this information belongs to the consumer. Oral testimony mean zip, zilch, nothing in the context of servicer abuse. Less than zero.

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I’ve registered as a consumer but to be clear I’m an attorney who has done real estate closings though it was never a practice area. Further, my comments that follow are admittedly not directly on point for this section but of the section choices this seemed the closest to my concern.

Two weeks ago I closed my own mortgage refinancing simply to get a much better interest rate. The closing documents totaled 127 pages, exclusive of the title report and home appraisal. The closing documents required approximately thirty signatures, and initials on almost every remaining page. So much of the information was repetative. My closing took an hour and a half and I (presumably) understood what I was doing. If I was representing someone, particularly the buyer, who wanted each document… more »

…explained, the closing process would have been much longer. This is information overload and unnecessarily, in my opinion, complicates the process and dilutes comprehension.

Now, in my case, I recognized that not all these documents were required by regulation for consumer protection. Nevertheless, a simple home mortgage refinancing should not require 127 pages to protect all parties with an interest in the transaction.

Welcome to Regulation Room, wburfeind, and thank you for sharing your experience. The disclosures required during a home mortgage refinancing are not at issue in this proposed rule. However, CFPB is proposing additional rules related to the disclosures required before closing. You can read more about them at CFPB’s website and comment on them here. As someone who has a mortgage, what do you think of CFPB’s proposed mortgage servicing rules and, in this case, the proposal on how to handle error claims?

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When borrowers call in for information or documents, Borrowers should be sent limited access permission to view only their account information and loan documents in the company document viewer portals, borrowers should be permitted to print out all docs found in their loan records. This automated process is relatively cost free for the institution and allows the borrowers to gain access to requested docs, and also information pertaining to servicing issues. Should the borrower have additional needs beyond this there should be a special link the borrower can intiate in the portal to request additonal information or personal contact from the institution. The institution can use this individual posting board to communicate with the borrower, log comments and actions regarding borrowers inquiry.… more »

…This posting board or communication log should be fully accessible by the borrower with complete transparentcy. « less

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From a technical standpoint, direct access to a loan servicer’s web based client portal via a simple username/password is impractical. There are many technical settings, VPN’s, etc that are set up when vendors access these. What they can do, however, is build the code & databases to allow borrowers to access this information via their consumer websites. They also need a way for borrowers to be able to submit, review, and update insurance information on these websites.

Many servicers, such as Bank of America, already have customer service available via chat through their website as well. Chat could be an option for customers who are weary of speaking to a representative over the phone and would like a record of the conversation. Either way, you have the right… more »

…idea that these companies need to both upgrade & better utilize their technological capabilities. « less

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Hi shannon, welcome to Regulation Room! CFPB is proposing an oral request system, do you think that will be useful for borrowers with questions about their mortgage? With respect to your website suggestion, are you suggesting that servicers use this online system instead of the oral request system CFPB has proposed or should this online option be available in addition to the phone system?

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What many people don’t realize is that ALL customer service representatives (even those for 3rd party vendors such as Assurant & QBE First) have AT LEAST read-only access to all borrower information. In the case of a system like FIS/LPS, if a customer calls in asking for a complete history of their loan, it would take a a customer service rep a maximum of 1 minute (assuming the loan is very old and the rep is very new) for a representative to screenshot the SER_ screen subsets (Services Performed), including SERN (C/S Notes), the HAZ_ screen subsets (Hazard Insurance), ORI_ (Loan Origination), or FOR_(Foreclosure), etc. For example, if you call in asking for Foreclosure information, they can fax/email you a screenshot of the FOR1 and FOR3 screens along with a quick breakdown of what… more »

…information to look for. Your lawyer should be able to call for this same information. Again, EVERY EMPLOYEE has access to this information. It takes 5 keystrokes to switch between screens if you manually type it or just press a function key (F1-F24) if you’re good. There is no reason this information can’t be provided to a borrower within 5 minutes instead of 30-45 business days.

Who owns the mortgage is simple…INV_ is the investor screen subset which shows all historic investors on the loan, and the current investor is listed on every _ _ _ 1 screen (such as SER1, HAZ1, etc). If original copies of loan closing documentation is needed, in a worst case scenario, it takes 5 business days to order from Iron Mountain. In most cases, it takes 1 minute to retrieve from the loan servicer’s loan documentation imaging database. « less

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versability: beautifully said!!! Brilliant! It took my servicer about 70 days to send a printout with my fees (not even half the fees were listed). The printout itemized the fees as: $ 625 “allowable fees” and $ 750 “mediation fees” (we refused to mediate). Well if I was the servicer I would do anything to NOT give out such crappy itemization, too.

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In giving the banks 5-45 business days to respond to information requests, I am left to assume that the CFPB has been watching too much Mad Men and is attempting to regulate a bank in 1960. Allow me to illustrate:

If I were to use my debit card to make a purchase anywhere in the world, it will show pending on my account instantly. Let’s say I’m really behind the times and I write a check. That check will clear the instant it is scanned by anything attached to the internet. We are no longer living in the checking times described by Tom Hanks’ character in Catch Me If You Can. There’s not a 10 day delay in a check clearing because it has to be mailed through central depositories and to corporate offices, etc. The banks who made this process instantaneous are the same… more »

…ones servicing our mortgages (and auto loans. I can not stress enough that these rules need to apply to ALL COLLATERAL LOANS).

Now. Let’s try an experiment to illustrate another point. No matter who you have an account with, whether it’s a bank or credit union, large or small, it doesn’t matter…Walk into a branch and ask for account information. That representative will immediately pull your information up and tell you what you need to know. If there’s a discrepancy and you’re arguing with them, they’ll even turn their monitor around and show you what they’re looking at right then and there. If you ask for anything in writing, they will hand it to you. If you ask for a screenprint, they will provide it. The line at the bank today still moves faster than it did in your grandparent’s day. Why then, when it comes to mortgages, does it suddenly take a week, a month, or longer to provide this instantaneous information? In fact, why can’t you walk into the same building you went to sign your loan closing documentation and retrieve that same information? You mean to tell me it’s an instantaneous process to deduct a check card transaction from the balance of my Arizona-based account for a $10 purchase I made in China, but that same bank is given nearly 2 months or more in order to find even the most minimal information for my $500k house?!?! Somebody please explain to me how that’s considered acceptable in any way.

Now think about something else. Have you ever seen a behind the scenes feature on a DVD? Have you ever seen the show How It’s Made on Science? No matter what it is, you can figure out how everything in the world works, is made, etc…except in the financial and insurance industries. Why can I watch a hundred videos for every aspect of how exactly Avatar (the highest grossing movie in history) was made, but the financial industry operates in the shadows? Am I the only person seeing how obviously corrupt this system is? « less

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If the CFPB gives the servicers a pass on not giving information more than a year after a servicing transfer, it is IMPERATIVE that the rules for a full information servicing transfer are solid and enforced. That has been addressed in another section, but I need to repeat how important it is that this is very closely regulated, monitored, and enforced. Loss of information between 2 banks at no fault to the borrower should never be allowed, and it happens all too often in the current environment.

As for “reasonable efforts” I illustrated this in section 1, but I’ll paraphrase for length here: all of the information is instantaneously available. If it’s not, it’s the bank’s fault, not the borrower’s. It is “reasonable” to expect that if… more »

…you lent me $100,000 that you would be able to tell me absolutely ANYTHING I ask about that $100,000 within a 5 minute phone conversation. If anyone needs an illustration, lend me $100,000 in cash right now from 1 private citizen to another. You are 1 person, and I am 1 person. I’m willing to bet I can call you at any time, and you will know how much I owe you. If you can do that as a private citizen, why can’t a loan servicer whose entire business is servicing loans do the same thing? A professional should always be better than an amateur. That’s why they’re professionals. If they’re not better, they will be displaced. That’s how capitalism works. If they haven’t been displaced, there is corruption in the air.

For “overbroad” and “unduly burdensome” information or “unreasonable volume of documents or information” I have to point out that there are hundreds of employees at every servicer capable of creating queries that can be implemented & applied quite easily (and cheaply) to pull ANY & ALL loan information for a specific borrower. It can all be exported into a spreadsheet, PDF, image file, and more. It is a simple process and can be attached to the SQL GUI’s utilized by every loan servicer with very minimal effort or cost to the servicer. There is absolutely no excuse not to be able to provide any information within 5 minutes. It is not a borrower’s fault that the banks lost their information, and if the situation were reversed, the borrower would not be given 45 days or any types of excuses.

Use your physical debit card anywhere in the world. Sign into your bank account 15 minutes later. The charge will show in your account. Write a check to pay one of your bills. Within 5 business days (slowed only by the company you wrote the check to, not the bank), an image of that check will be available online. If these companies can accomplish this, why can’t they access their loan information? It is criminal racketeering, and it needs to be stopped, and they need to be thoroughly punished for these continued crimes. These CFPB rules thus far are a complete joke.« less

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Every single rule is catering to the servicer, not the consumer. If these rules are implemented you don’t even need to worry about writing a QWR. Might as well reverse Respa law. If they can give answers orally they can lie. And they do lie, believe me. I have these lies in writing and it is the only way I can hold them accountable.

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CFPB is trying to limit costs to servicers because servicers might pass these costs on to consumers. They could do this either by raising their rates or by reducing the credit they offer to consumers.

CFPB replaced the qualified written request because it wanted to make getting information easier for consumers. Is there any way to keep this benefit while still keeping servicers accountable, as with information requests?

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Most information can be provided electronically. If servicers are interested in cutting costs, they already have many electronic systems in place to provide this information. I’ve worked in the back end with these servicers. I know how their systems and SQL databases are connected. I know what reports are available. It is absolutely unacceptable for them to claim any information is “unreasonable” to retrieve. It is nothing more than an excuse they are using to keep anything from changing.

For the record, there are VERY FEW “rules” that the CFPB are proposing that are any different than what the servicers already have in place. How does the CFPB plan to catch anyone violating these rules anyway? The fines are minimal, and the audits are a joke. In the 7 years… more »

…I worked in the back end, there was only ever 2 audits, and in both cases, we were given a week’s notice of the information what would be reviewed during the “surprise” audit. During this time, reports were adjusted, numbers were faked, and mistakes were hidden. I’ve seen nothing in these proposed “rules” that will have any affect whatsoever on any of the corrupt happenings I’ve witnessed during my career with the banks. « less

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I wrote a QWR to my new servicer. It took three weekes for them to send an aknowledgement letter back. I’m not a trial lawyer, just a consumer with very limited resources. The QWR was perhaps the only tool available to consumers to get information, eliminating it seems counterintuitive of what consumer protection is all about. Where did CFPB get the data that “it is often trial lawyers, rather than ordinary consumers” who submit QWR’s? I would be skeptical if that claim comes from the servicers. My QWR asked for a lot of information because the new servicer won’t give me anything. CFPB needs to understand that some servicers will take advantage of whatever rules you impose, and if you want to protect the consumer you need to strengthen their rights, not weaken them.

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Thanks for your comment, hotblazer. CFPB explains its statement about lawyers submitting QWRs more often than consumers here. However, CFPB wants to change this and make it easier for consumers to get information from the servicer themselves without outside help. Do you think the timeframe rules in Section 1 of this issue above would make it easier for consumers like you to get the information they need from servicers?

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Yes I do think the timeframes are more realistic. Easier? Not really. The servicer can still invoke any number of vague claims that thwart the borrower from getting information. I think the extensive list of reasons why a servicer does not have to answer will be used repeatedly. “Not in the normal course of business” can be invoked on every request, delaying an answer on the first try every time. The servicers can and will use any weapon that the CFPB hands them. I am not a lawyer, but I see huge holes in these rules. There’s too much emphasis on making sure the servicers are accomodated, at the expense of the borrower. Calling a servicer does not mean you will get an honest answer. The assumption is the servicer is honest so the rules are proposed this way. Taking away the… more »

…borrowers only legal means to force a servicer to cooperate is not consumer protection. Please think about this before weakening the consumer’s position. I’m sorry I seem so negative, but when you become a victim of a predatory servicer, you start to understand that they will do harm intentionally, as policy, and have no fear of being held accountable. « less

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This shows you how rotten this servicer really is. Maybe the moderators can look at this and see where the borrowers are coming from rather than focusing on the “impact” to the servicers. Nationstar is as corrupt as thet come, and these rules do nothing to give the borrowers real power to fight back.

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As a previous servicer of accounts, the timeframes in which the servicer has to respond are VERY generous almost to generous, really this information is not that hard to provide especially if it is given verbally, written notices to the consumer would take longer.

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Thanks for your insight, reality. Did you work for a small or large servicing company? CFPB is especially interested in the effects of these rules on small servicers. Do you think that shorter response time frames would be more or less difficult for servicers with fewer employees and resources?

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“Congress directed CFPB to also consider the costs to the companies it’s regulating and whether new rules will cut back on new lending to consumers”.

This has always been the threat from the banks: “we’ll cut back on lending”. Well, they have already done that.

This is not about cost cutting. I wrote a QWR to find out about fees and the servicer hires a high profile law firm so they don’t have to answer. How cost effective is that? If they would not have attached unexplained fees, they would not have to spend money on lawyers. This is CAPITALISM. If the business doesn’t make them enough profit, get out of the business. If illegal behavior will cost them, they should consider not doing it anymore. How about quitting robo-signing? How about not… more »

…attaching illegal kickback fees anymore? How about getting documents in order? That all would cut their legal fees immensely. « less

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I would like to see the lenders answering orally and sending an confirming letter or email at the borrower’s option. If they can’t answer immediately on the phone, then in addition to having to respond in writing to the question, they should have to confirm in writing the question and that they are working on obtaining the answer within a specific time frame.

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I think this is a reasonable solution. Homeowners should be able to get answers over the phone, but then the servicer should be required to ask if they would like a written confirmation of the information. (Of course, the homeowner should say “yes, please”).

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In this age of the Internet, I think there should be a rule requiring mortgage servicing companies to provide access to loan information online. I currently have a mortgage from a company who does not offer this. Since I often deal with financial matters at home after normal working hours, I much prefer having online access instead of having to make a phone call to get the information.

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Welcome to Regulation Room, emmel65, and thanks for your comment. Have you had experience with requesting information in writing from your lender? In this rule, CFPB is proposing that lenders have customer service available by telephone. Would extended hours or a voicemail system help accomodate your schedule?

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Terms like “unreasonable volume of documents…” or “unduly burdensome…” or “unreasonable costs…” without specific definitions will foster a virtual loop hole for servicers so avoid responding to consumer requests for information by simply making a subjective decision that the consumer’s request is “unreasonable” “overburdensome” etc. Once again it leaves the consumer without any real teeth to get results. Also, the limitation of 1 year after loan was transferred or paid off is too short of a period of time. Currently, many consumers are not made aware of the error until they seek to buy a new home oftentimes many years later. The credit reporting of the mortgage loan is often done so with errors such as a reported… more »

…“foreclosure” or “paid for less than full balance” or ” settled” when that may not be the case. It may be several years before the consumer is made aware of the error. Many regulated industries require entities to maintain records for 7 years. Why not allow the consumer 7 years to request information. This would be consistent with the time period for credit reporting of most inaccurate credit items. « less

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Welcome to Regulation Room, reneydubose, and thanks for your comment. CFPB wants to make it easier for borrowers to get information from their servicers while also making sure that servicers won’t be overwhelmed with information requests. You can learn more about CFPB’s definitions of the terms you are concerned about here. What would you like to see added to these definitions to make it harder for servicers to avoid information requests?

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Unless borrowers are required to tape record every conversation, I fear oral communications only adds miscommunication and could lead to possible deceptive practices.

For example, prior to my foreclosure calling the title co. only four original loan pages could be retrieved to my loan. Both the local and corporate offices couldn’t find documents to my loan. It wasn’t until after foreclosure did I learn to contact the department of insurance to file a complaint. It was then did I receive some specific loan documents requested. I later thought to ask how pages related to the loan application are transferred between the broker, loan originator, and title. I called title and was told that the only pages kept on file are per the lenders instructions and that they do not keep copies… more »

…of loan applications on file. This was unfortunate to hear since that was not my question and title had already previously sent me copies of those pages.

The example may not be directly related to servicers but it was meant to demonstrate how a simple inquiring question could raise new questions as to whether the oral experience was a miscommunication or a deceptive practice. Unfortunately, I do not recommend this.« less

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Hi steve smith. Thank you for sharing your experience with Regulation Room. It sounds like you are concerned that requiring servicers to respond to oral requests could lead to miscommunication or encourage deceptive practices. Does anyone else share CFPB’s concern that requiring borrowers to submit formal written requests ignores the fact that most borrowers attempt to get information over the phone?

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A check list of disclosures and rights to legal disclosures should be required at every closing on the front page. A borrower shouldn’t have to hire a third party or search over the internet to discover what legal disclosures they are entitled to. Here are some exampled objections to why consumers need all disclosures:

Prior to my foreclosure, a third party (under RESPA) was hired to send out a QWR; it consisted of six pages sent certified on 4-19-2009 requesting documents to which I never would have known I had any rights to.

The servicer replied on 08-10-2009 to the third party and never CC any copy over to me. When the third party sent me a copy, the letter stated that the servicer responded enclosing the Adjustable Rate Note and Mortgage but the remaining request were internal… more »

…business records and did not need to be furnished under RESPA 12 USC section 2506 (e)(1)(A). The third party in my opinion knew what to ask for. Consumers aren’t provided with legal disclosures rights nor do they have any means or instructions to find out. Why further place any more restrictions.

The servicer in the same response letter stated that they had nothing to do with the loans origination and that they were not affiliated with the original lender. The servicer included a contact address and phone number to where the loan originator could be reached. When trying to contact the original lender, the phone was disconnected and a letter was returned labeled rejected.

What I found out later at the Security Exchange Commission website was the bankruptcy purchase agreement between the loan servicer and my bankrupt loan originator. It described my servicer purchased the loan originators servicing rights, business assets, and the actual building to the contact address they provided to me in letter.

1. There is a great need for a third party service since consumers are limited on knowledge.

2. Notice the four months it took for the servicer to respond.

3. I did not receive an account history until after foreclosure, and after filing a complaint with Department of Corporations.

4. I don’t see how a servicer who purchases servicing rights, the building, and assets can inform a consumer to contact a defunct originator in which they know is no longer present. The joke was on me and the servicer had to be aware of it.

I do not see any points in protecting servicers if their designed intent is to stall, collect, and use deceptive practices that further damage consumer rights. Deceptive practices restrict consumers from being able to afford litigation when facing foreclosures. I do not think the CFPB should be equating any such leniency for servicers. « less

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You raise a number of points relating to disclosure rights. It would be helpful to get some more detail. What sorts of disclosures do you think would be the most helpful in the checklist? And what do you think about CFPB’s proposed list of items that servicers should not have to respond to? Would you also include this list in information provided at every closing?

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“What sorts of disclosures do you think would be the most helpful in the checklist?”
Financial disclosures! Loan applications must be present an accounted for. Dates and time of process with signature. Borrowers should not go home with copies having no signatures or dates. Large bold type high risk warnings to certain types of loans.
Any and all federal and state required forms or brochures from pre-approvals to the closing of the loan. Contact resources to any and every department that has oversight or jurisdiction over lending.

“And what do you think about CFPB’s proposed list of items that servicers should not have to respond to?”

Any other disputed rights. Should forever be monitored, addressed, and updated by the CFPB for the borrowers to access and… more »

…review. That question becomes complicated as it falls under Real-Estate, business, Corporate laws. But I also don’t believe borrowers are making unreasonable requests.

“Would you also include this list in information provided at every closing?”
Oh, yes!

I haven’t found any describe disclosure list under current lending laws that borrowers can cross check with their own loan pages. But there many examples of lending forms shown over the internet. For example, I’m looking for a form called the 1008 Transmittal Summary. The vice president of title said they don’t know what that form is but will call when they find it. That was over a year ago.

Example 2.
My last letter from the servicer wrote back. “Pursuant to 12 USC 2605 sec(e), the information that may be obtained on a loan under a QWR is specifically limited to information relating to the servicing of such loan… includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.”

I challenged the “other information sought by the borrower” trying to gain access to original documents in relation to my loan. My servicer says they do not intend to waive their rights to other various documents sought by the borrower. So, access to original loan approval documents are impossible to access since the loan originator is no longer in business.

Consumers finding themselves financially strapped in these predatory or deceptive practices can not become overnight legal experts on law and they can not afford lawsuits or subpoenas when trying to simply request disclosures related to their loans.« less

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Bravo Steve Bravo!!! You spell it it very well. There are servicers whose conduct is reprehensible, nothing short of a lawsuit will bring any form of accountability. The rules and regulations protection consumers are already weak, and the proposed changes weaken the consumers position further in many ways. Servicers are not above lying, they do it every day. I guess the rulemakers can no seem to grasp what is really going on, but your story of being directed to a defunct loan originator is another example of their deceptive practices. None of the rules will fix that though…

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Thanks hotblazer. Not only do they claim that they have no affiliation with the originator and that they only purchased the servicing rights. After the borrower from frustration gives up and enters into default the servicer just calls themselves a debt collector. Has the CFPB considered these rules in connection to the Fair Debt Collection Practices Act since the servicer is now calling itself a debt collector?

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steve smith, you raise an important question – the extent to which the new rules relate to or conflict with other, existing laws like the Fair Debt Collection Practices Act. CFPB is seeking comment on just that question – in particular, on whether servicers will have difficulty meeting the requirements of this rule as well as the Fair Debt Collection Practices Act. Do you anticipate any conflict? Or do you think the Fair Debt Collection Practices Act can provide added protection for borrowers?

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The Fair Debt Collection Practices Act does seem to provide added protection for borrowers. But I’m concerned when the servicer becomes a debt collector. At the time I wasn’t in default my servicer already classed itself as a debt collector. As shown in this video.

What is the need for a servicer to class itself as a debt collector? I see added conflicts just by allowing the servicer to create another entity when the foreclosure sale date hasn’t even occurred? By becoming a debt collector doesn’t this allow the servicer to decide which and at what time the laws are applicable to them.

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Hi steve, and thanks for another thoughtful post. I’m pretty sure you’re suggesting that servicers should not be allowed to also be debt collectors. Unfortunately, making that change is beyond the scope of these rules (unless you think the requirements of the FDCPA conflict with the requirements of the new rules). Could your concern be addressed within these rules? For example, by requiring servicers to disclose on the periodic statement that they are also debt collectors?

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Steve you have posted an excellent example of how people continue to get the run around. One of the reasons the servicers/debt collectors seem to not care is because really they are not obligated to the borrower. The servicer has a contract and a fiduciary duty to the INVESTOR. The borrower is an account the servicer manages on the behalf of the INVESTOR. So “customer service” really is a misnomer, they do not view us as customers. They view us as accounts. The servicer does not have a fiduciary duty to the borrower, so they really do not care about anything except the revenue the account (you) provide. The caveat is that the INVESTOR wants the account to keep paying, but the system is designed to bring more revenue to the servicer if the borrower is late or in default. Can you… more »

…say conflict of interest? So getting the servicer to provide information about the INVESTOR is like pulling teeth. The servicers guard this information because they do not want the borrower to tell the INVESTOR what is going on… « less

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Hi hotblazer, thanks for your comments. CFPB has focused on how difficult it can be for borrowers to get information from some servicers. It wants to help simplify the information request process so that borrowers can get the information they need. They have done this by proposing rules that define the types of information servicers must provide (as well as the types that servicers don’t need to respond to) and placing time limits on when servicers must respond. Should the list of required information be expanded or the list of exceptions narrowed? (CFPB is trying to balance the requirements and the exceptions so that borrowers get the information they need, but servicers are not overwhelmed with information requests.) Are there other things CFPB should consider in order to make the information that borrowers need more easily available?

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Moderator, I think the list of reasons that the servicer does not have to respond is open for abuse and continual stalling. Most information that consumers ask for or need are just a few keystrokes away for the servicer, but they make it difficult if not impossible for consumers to access that information. I hope the new rules will bring relief to homeowners, but right now the servicers have no real obligations or duties to the homeowners. The entire mortgage servicing system is flawed from the start.

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Hi hotblazer. Could you clarify which items on the list you are concerned about? Or are you saying that you feel the servicer should have to respond to every request, including requests for information that it doesn’t have? Do you think that requiring the servicer to tell the borrower within five days if it thinks it does not have to respond to a request and to explain why will help prevent a servicer from stalling?

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As someone who has been in the industry for well over a quarter I can give some insight here.

For a small to midsize lender the mortgages will often be stored on a system that is not connected in real time to your core processing system. This would prevent someone from being able to view their mortgage on their home banking page. It’s not meant to be secretive but it is just a fact that different computer systems often do not communicate with each other.

I am against having oral and written requests being treated equally. Written requests have, by their nature, a more formal stature and create a paper trail. An oral request will create a “he said, she said” conflict.

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cu man, thanks for sharing your experiences with how lenders’ computing systems work. This kind of on the ground perspective is helpful. Do you think that even if the borrower can’t access information in real time online, the information is accessible enough for servicers to answer the borrower’s question in the timeframe CFPB proposes?

Several other commenters have raised your concern about the possible lack of a paper trail. Does the 5 day deadline for the servicer to confirm they received the borrower’s request help solve the problem? Do you have other suggestions on how to make it easier for borrowers to request the information they need?

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The “Periodic Statement” that you have placed up for review could solve almost every issue brought up here if “Transaction Activity” had to be inclusive of any and all account activity, directly or indirectly, addressing companies by name instead of general categories. The cure is literally that simple. The Transaction Activity” category is currently set up for generalities that enable bank fraud and deception, which is the problem. *******Tell me what issues listed in this column, could not easily be solved, in this one category, on your “Periodic Statement”? Look at the problems needing addressing here with this question: “no obligation to homeowner”, “”run around”, “accountability”, “weak rules”,… more »

…“lying”, “deceptive practices”, “disclosure rights”, “vague claims”, “emphasis on servicer accommodation” etc….. It is important at this point, to see which other questions you have that could solve all of these problems and start linking your problem questions with your solution questions. It’s not a flow chart but it’s a start. If the problem is asking for and getting information then make the information more detailed and available monthly. This is just common sense. Transparency also allows borrowers to police their own account because our government is lacking funds right now and can’t afford an investigator for every account every month. Why would allowing a borrower, to investigate their own loan monthly, by changing “Transaction Activity” to include more detail, not be the answer? It is the only solution to investigation and transparency issues that are being brought up here, in all different ways. (THIS IS THE ELEPHANT IN THE ROOM) The banks have to enter all activity into their computer anyway’s, to report to the IRS, this information just need to be entered differently and does not add any work, it’s a slight software issue that needs fixing. Look what a quick books cheep program is capable of, when you add it to your computers. The banks are running circles around the regulators and law makers. The banks are acting like they never make changes to there software. Hello, software is constantly changing and there are too many companies selling bank software to dispute this. Just like car makers need rules on more fuel efficient and safety rules and changes, banks need rules on borrower safety and transparency, it’s just not being done. « less

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The CFPB wants periodic reports provided by creditors, assignees, or servicers to balance the need to provide useful information against the risk of overloading consumers with too much information. If a consumer wants additional information about their mortgage loan, the CFPB would require servicers to respond to consumers’ written and oral requests within a specified amount of time. Because expanding the way consumers can ask for information encourages use of the new disclosure system by attorneys, rather than ordinary people, the CFPB would allow servicers not to respond to certain types of information requests. Do you think the CFPB has struck the appropriate balance? Do you have an example of the kind of indirect transaction activity that… more »

…you think should be included in the sample periodic statement?

You also mentioned that advanced software and technology is available to servicers that would simplify the disclosure process. What do you think of the proposed exception servicers would have that would allow them not to respond to “unduly burdensome” information requests? « less

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Moderator, why is the CFPB concerned about giving the public too much information when almost all of the complaints are about not enough or wrong information? Not one person is complaining because they have “too much information”. The public is pulling their hair out because of lack of information, run around and lies. If all activity in a borrowers loan account is disclosed to the homeowner monthly, their would be no “unduly burdensome” phone calls to the servicer. Why is the CFPB complicating things further by separating what information only an attorney can get as opposed to what a borrower can get. A lot of borrowers represent themselves, then what? Why should only an irrelevant third party at a price have transparent information on your loan? What information… more »

…are they only allowing an attorney to get? Splitting the disclosure up between different companies without a simple monthly transparent statement is ignoring the real problem. Where is your question about what rights you are in the process of taking away from the public? I am the poster child for mortgage abuse, having found crime in almost every category, in reference to my home loan. I can tell you, the only thing that would have prevented this from happening, to me, would be if the “Transaction Activity” category, in your new sample Periodic Statement (or monthly loan statement) include all activity related to my loan. Keep in mind this is not a regular bank statement with lots of entries. This a 1 simple loan statement and there should only be a few entries under “Transaction Activity” each month with transparency. For example, if JP Morgan gives Assurant money for a force placed insurance policy and Assurant cuts a check back to JP Morgan or a subsidiary of JP Morgan for 75% of the policy and both activities are related to my loan then the servicer needs to record both under “Transaction Activity”. I can see why the banks would say this is being “unduly burdensome” when they have to document what they are really doing to people. What did you think they would say, we want to put all our crimes on paper and be held accountable, let’s do it? If the servicer charges for a drive by inspections after your house sold then the company name and phone number need to be in Transaction Activity showing the payout. If your servicer and the closing agent both collect your current years property taxes at closing, the day it was paid out should show up in your “Transaction Activity” so you can find it. If the bank is going to keep your account open for 6 months, after your closing, charging you additional interest, to use up some of the over stated closing money, then the bank should send you monthly statements, for 6 months, showing what they are doing behind your back. Limited disclosure like you are proposing is bad but you should see what happens, after the closing, when no disclosure statement is mailed out and your account is left open. You don’t know the half of it. Do you really think it’s better to have a 4 year investigation, into force placed insurance, with lots of hearings, to finally get a company, to admit they are cutting back, up to 75% for force placed insurance policies, back to JP Morgan Chase, when they initiate a policy? Because this entry was not required, on the monthly statement, is the reason so many people, have been so badly abused and why this went unnoticed for so long. You say the banks claim it is “unduly burdensome” to tell me what they are doing to me. Let’s dissect the banks objections and make some real progress. “Transaction Activity” transparency is the category where the problems and solutions rest and it is being swept under the rug, with your plan, with very little disclosure and you are not hearing the “ORDINARY” people. Moderator, please get a list from the CFPB of all the “unduly burdensome” issues the bank claims is beyond the roll of “servicing” a loan, that they are afraid to disclose. Unless someone is being over paid or generating some third party fraud that requires information to be hid, the banks should be happy to put everything on the monthly statement, to relieve the servicer, of the burden of all the phone calls. The truth is the Banksters know, that they have to put up with, unduly burdensome phone calls because the only other alternative is to expose their crimes, under “Transaction Activity” and people will no longer need to call. With full disclosure, the banks and the CFPB’s phone should hardly ring, in reference to mortgage loans. How many entries could there possible be in one loan in 30 days? If you leave this category, the way it is now, you have just enabled the circus to continue. Bottom line, it is not up to the banks and servicers to determine how responsible they are going to be, it is up to the government to set the standards high not low, with transparency. Why will Obama not tell Richard Cordray to demand full disclosure, from the banks, for the “ORDINARY” people, if a bank wants to be able to continue to lend money, end of story! If I understand you correctly, you are going to limit even further the information available to the public, making some of it only available to attorney’s, “which would allow servicers not to respond to certain types of information requests” according to you. I get real nervous, when you talk about a “new disclosure system by attorneys, rather than ORDINARY people”. What is even more scary is your solution for the question that we are currently discussing that addresses not being able to get information from your lender. Your solution talks about the CFPB’s worry about “the risk of overloading consumers with too much information”. I have been alive for 50 years and nobody in any conversation has ever complained that their lender has given them too much information. I realize that Adam Levitin, that just joined the CFPB, as an advisor, is an attorney and could benefit from this rule but after reading some of his amazing papers I would love to know what he has to say about this. Would he leave a comment? My opinion is, you don’t limit borrowers information further to reduce crime and increase transparency. The ordinary people should not have to pay out any money to get information on your loan it should be provided monthly. Look at the earnings of the largest servicers even with all the lawsuits and you should agree they need to start offering service for their earnings. A couple of entries a month is hardly a burden for this amount of wealth the banks are generating from the ordinary and the banks probably cannot even believe they are getting away with providing such little detail.
(Borrower Problem: borrowers not given information Solution: borrowers get all relevant information monthly, timely).
(Servicer Problem: unduly burdensome phone calls where answers are few Solution: Borrower gets all relevant information monthly eliminating unduly burdensome phone calls) « less

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Hi Transparency. CFPB has not proposed a “new disclosure system” for attorneys that would give attorneys privileged access to mortgage information. Instead, it wants to make information more accessible to borrowers and feels that servicers will be able to devote more resources to providing borrowers with specific information about their mortgage accounts if servicers are not overwhelmed by the types of burdensome information requests that are more likely to come from attorneys and are better suited for the discovery phase of litigation.

Please also remember that the purpose of Regulation Room is to provide an environment in which people can learn about important proposed government regulations and discuss them in ways that help the agency make better final decisions. Moderators are here to facilitate discussion on CFPB’s proposed rules and do not take sides on the issues.

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I don’t have time to address each category individually, so I want to make a plea here for common sense!

As others have pointed out, if banks, lenders, and servicers have nothing to hide, why not provide the information that consumers need as clearly and quickly as possible? While there may be legitimate reasons for delays or missing information, oftentimes obfuscation and complicating tactics mean there are things they don’t want you to know, or they hope you will just go away. This happens in many industries–health insurance is a good one.

If the government’s job is to facilitate commerce, and also prevent fraud, both could be served by simply requiring mortgage businesses to behave transparently. It’s the old Golden Rule applied to business! If they won’t agree they should have a legitimate explanation or be denied the opportunity.

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I agree Britt, This information belongs to the consumer. Forcing a querant into discovery is unfair, expensive and very often a lengthy process. The burden should NOT be on the consumer to retrieve ALL information in their mortgage file. To do less not only harms the consumer it harms the public records. Stop negotiating with these banks, force the banks to organize their records and reconcile them with the registries. ENOUGH ALREADY.

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Hi anne.hart.5070. Welcome to Regulation Room and thank you for your comment.

The CFPB with these new rules is looking to expand requirements for servicers to provide information. Today servicers are only required to respond to “qualified written requests” related specifically to “servicing” as defined in legislation. The new rules would obligate servicers to reply to both oral and written requests. The new rules would also obligate servicers to disclose information that is generally found in a borrowers mortgage loan file and not just information related to servicing.

However, the CFPB does not want want to place unmanageable burdens on servicers. One… more »

…example the agency gives is a request that a diligent servicer would need more than 45 days to answer.

Is there a specific type of information you are worried might be excluded by these rules and that you think is important for consumers to have? How would you modify these rules to achieve the results you might seek? « less

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Why are you leaving it up to the servicer to determine if the information being requested is “unreasonable”? The CFPB is not listening to the “ordinary” people because this is the problem now, not the solution. The banks are probably being asked the same 20 or 30 questions over and over about loans. Please ask Versability for a list of the questions, in relation to a loan, that people ask that are currently not covered on the sample monthly statement that could easlily fit on the statement. Varsability that is emailing you, is trying everything to address transparency issues and has the answers you are looking for. Why don’t we separate reasonable questions from unreasonable questions. Ask Versability, how many of the questions could be answered on the monthly… more »

…statement and eliminate entire categories of crime and eliminate the need to beg for additional information by the borrower. Versability is an insider, bank person that understands banking software and what they are capable of doing. Why is the ultimate goal here, not to reduce as many phone calls as possible, for the borrower to make and the servicer to receive, by providing all monthly activity, in a transparent monthly loan statement, by maximizing the “Transaction Activity” category. (common sense) Everybody is emailing Regulation Room their information problems. It is time to make a list and determine what is “reasonable” information and what is not with specific questions or this is useless. Until we do this we are not even addressing the problem. Should the government tell the Banks, if we are going to give you money to lend, then all activity between banks,servicers and third party vendors in relation to a loan directly and indirectly, has to be transparent to the borrower in “Transaction Activity” monthly? The government needs to say, this has to be a requirement, due to the uncontrollable level of fraud, money laundering, deception and irresponsibility that the ordinary people are being put through unnecessarily. The current system is not working and there are no other alternatives that will solve this problem. Why will our government not step up their game and say, we are not going to allow the banking system any longer, to hide their over priced expenses, behind four interchangeable standard responses that include: “that is proprietary information” or “that is non-recovery” or we are not going to answer your question in relation to expenses, that your account was billed etc… We already know what the servicer is going to determine is “unreasonable” and they will apply the same 4 lousy excuses over and over that I have addressed above, that happened to me. Although it was not the largest monetary crime committed in my account, my following example demonstrates the lack of quality response that is the standard servicer response and manipulation of excuses that the current system allows and the proposed generic changes will let continue. Sadly, this will continue based on the leave it up to the banker to decide if it is an “unreasonable” question, as the solution. Do you think this is unreasonable? I asked who did the drive by inspections of my home, that my account was being billed for, AFTER my home sold. The bank informed me this information was proprietary. I received a check for the over billing with no description on the check. When I asked JPMC why they mailed me a check dated… for the amount of…. and the check cover page even had a bar code and a check a number. Chase responded with: “Chase does not have a record of the letter you are referring to in regards to refund of fees” (Sorry our computer is stupid game). The current system allows banks to be reactive and return only money on an “as busted system” ( HUGE PROBLEM NO SOLUTION) (reactive instead of proactive) When a servicer receives a letter questioning something just refund it. If a borrower is given little information on expenses in their account and you do not get a letter then you keep your ill gotten gains. It really is a simple system based on limited information. With the current system, the servicer just needs to set up a “got caught expense fund” and consider it the cost of committing fraud instead of cost of goods sold. The government is responsible for this current broken system by not requiring transparent monthly statements with strict guidelines on the use of “Transaction Activity”. Versatility as a insider and me having uncovered fraud in almost every categories of my loan payoff statement will both tell you this current disclosure plan does nothing to address the worst problems. (Problem:Banking fraud and secretive activity involving your loan account that increase your payoff and over states your expenses. Solution: eliminate the secrets with 30 day all inclusive, loan activity statements and there are no questions or secrets allowed). The problems are massive and the solutions are so simple. So Servicers don’t have to provide “confidential” (AKA that is proprietary) or “general corporate” (this is soooo generic and generally covers anything servicer related and my “that is non-recovery” would even fit here it is so generic and useless) and if the request for information can not be rejected with one of these generic categories jump to “for information it does not have” (AKA Sorry our computer is stupid game) I could go down this whole list but I think the point is made that this solution is not helpful and is actually counter productive by legitimizing the response that I received above.« less

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Problem: “The servicer would not have to respond to requests that come more than 1 year after the loan is paid off.
Solution: No time limit to expose mortgage abuse. We have not solved the problems in 4 years so how could one year be a fair time line? (Common sense)

Problem: Allowing servicers to charge for information on your account.
Solution: All monthly account activity directly and indirectly needs to be transparent on the monthly loan statement, this is not an alicart restaurant.

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